NatchBytes: Skratch Labs Unleashes the Power of Amazon's Seller Central
Dr. Allen Lim spent a decade as a sport scientist and coach for a professional cycling team. While on the Tour de France, he discovered cyclists were getting sick from the traditional pre-packaged sports bars and drinks. He started diluting their sports drinks to lower the sugar concentration while adding back extra salt and electrolytes to replace what was actually being lost in their sweat. News spread of Allen’s “real food” recipes. Soon, other athletes, concerned parents, and normal active people were asking where they could buy the products.
To meet the demand, Allen launched Skratch Labs in 2012 and started selling products in bike shops across the country. Store owners and cyclists (their first “influencers”) were an important part of Skratch’s growth and success. Today, e-commerce accounts for 50% of Skratch’s business. We spoke with Jeff Donaldson, Vice President of Marketing, to learn more about why Skratch Labs prefers Seller Central and what keeps him up at night.
Q: Where did you start selling your product first - online or brick and mortar? Why? Would you do it the same way today?
We started in bike shops across the country, and that was critical to the strength of the business today. Shop employees were both our consumers and our retailers, so they added validation to our brand and products. Today, they are our influencers, so we do research and product testing with them to evaluate if new ideas will thrive.
Q: How important is your online to your company’s strategy?
Online represents a significant portion of our strategy because of the way our fans shop. If we didn’t sell online, we’d be ignoring their needs. E-commerce is 50% of our business between Amazon and Shopify. While it’s an important and growing channel, it’s only one part of how people shop and buy. So we’re building it up in conjunction with strengthening the traditional channels of our business.
Q: What channel has had the biggest impact on your online growth in sales and community building?
Amazon and Shopify are critical to our business for different reasons. On Amazon we reach a global audience and can grab share from competitors. While we don’t own any of the consumer data, it’s a different story for Shopify. We use that channel to engage and sell at the same time. It’s critical to the lifetime value of our audience and we can have more fun with them.
Q: When it comes to digital, you can do-it-yourself or hire experts. What do you recommend?
We hire outside experts to fill in the skill and knowledge gaps we don’t have. Once we’ve learned it, we do it ourselves. With the exception of website development work, we do everything in-house. We currently manage our digital media and content development for our all of our channels.
Q: Influencer marketing, yea or nay, and why?
Yea if it can be done right. For us, an influencer must be an authentic believer and fan. Since we try as hard as possible to be a transparent and real brand, hiring influencers who have never heard of us just feels slimy. But influential fans can reach more people that we can, so we definitely use them.
Q: Amazon’s Vendor vs. Amazon’s Seller Central — who wins?
Seller Central. One of the strategies that has been a significant part of our success has been establishing and having our partners adhere to a MAP (Minimum Advertised Price) policy. Keeping prices as consistent as possible enables us to maintain our brand story and strengthen retailer relationships. Amazon’s Vendor Central jeopardizes that strategy because it takes pricing out of our hands.
Q: The digital landscape is constantly changing for natural/organic products. What do you think is going to happen next?
I believe natural/organic is going to become mainstream and won’t be as much of a differentiator with consumers as it has in the past. That shift will force brands to become creative about how they engage customers rather than just pushing their natural/organic message at them. Many brands are feature and benefit focused, but that just means that brands try to out-feature each other. Consumers are looking for real experiences from brands so those that can move beyond shouting about their organic certification and give the consumer a real experience will win.
Q: Online platforms are constantly changing the rules and relationships — Facebook’s privacy issues, Amazon + Whole Foods. What makes you most nervous for your digital business?
Honestly, distribution makes me the most nervous and keeps me up at night. The clear lines between retail stores and distribution are blurring (UNFI, Amazon, Whole Foods as an example). Consolidation of those separate channels removes power from the brands and puts it in the hands of those who may not have the brand’s best interest in mind.
Q: What blogs/newsletters do you recommend to those looking to stay on top of digital trends?
Trendwatching: Way out ahead of traditional CPG.
SellerLabs: Great info on Amazon (webinars, newsletters, research).
Skratch Labs newsletter: The only way to stay informed and entertained about all things sports and nutrition.
Q: If you were advising a new natural products company on where to invest their time and energy for online sales and community growth, what would you tell them?
Use IRL experiences (events, trade shows, sampling events) to drive online engagement. Once a consumer has an in-person experience with the brand, it’s hard not to remember it when they see it online.